Measuring income inequality

Artikel

Economists use various metrics for measuring income inequality. Here, the most commonly used measures—the Lorenz curve, the Gini coefficient, decile ratios, the Palma ratio, and the Theil index—are discussed in relation to their benefits and limitations. Equally important is the choice of what to measure: pre-tax and after-tax income, consumption, and wealth are useful indicators; and different sources of income such as wages, capital gains, taxes, and benefits can be examined. Understanding the dimensions of economic inequality is a key first step toward choosing the right policies to address it.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: IZA World of Labor ; ISSN: 2054-9571 ; Year: 2019 ; Bonn: Institute of Labor Economics (IZA)

Classification and Topics

• Classification: Wirtschaft ; Estimation: General ; Distribution: General ; Personal Income, Wealth, and Their Distributions ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; Wage Level and Structure; Wage Differentials
• Subject: inequality ; Gini coefficient ; interdecile ratios

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Trapeznikova, Ija
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2019

Further information

• DOI: doi:10.15185/izawol.462
• Handle: http://hdl.handle.net/10419/206602